Referring to cultural Marxism, especially the Frankfurt School, Noam Chomsky once said, “I don’t find that kind of work very illuminating… The ideas that seem useful also seem pretty simple, and I don’t understand what all the verbiage is for.” While I think there’s much of value in the so-called Western Marxist tradition—for instance, I’m partial to Georg Lukács (more so than to Adorno and others in the Frankfurt School)—I have to admit I strongly sympathize with Chomsky. But his criticism generalizes, and is even truer in other areas: since well before the mid-twentieth century, a large amount of work in the humanities has been prone to unnecessary and sometimes incomprehensible verbiage. Later this tendency came to be associated with postmodernism, for it was most pronounced in the writings of such luminaries as Derrida, Lacan, Kristeva, Deleuze, and Foucault, as well as their hordes of epigones. By the end of the twentieth century, a vast field of “Theory” had reached maturity, encompassing much of philosophy, anthropology, psychoanalysis, and literary, film, and cultural studies.

As an anthropologist, David Graeber works in this broadly conceived “interpretive” tradition (I call it that because it consists essentially of endless cultural and social “interpretations” or “theories,” often playful and highly verbose conceptual exercises). He has an advantage over many of his peers in that, while not a particularly great writer, he can at least write clearly and informally enough to be widely read. Presumably this lucidity helps account for his fame—as do, more importantly, his heterodox ideas, his ability to capture a cultural mood even in the titles of his books (Debt, The Utopia of Rules, Bullshit Jobs), and his impressive productivity. Perhaps he’s tooproductive: while reading his latest book, I couldn’t help thinking it would have packed a greater punch if he had shortened it by a third. It meanders and meanders, repeats and repeats, and, well, I didn’t understand what all the verbiage was for.

But that’s the intellectual game, after all. Unless they’re unusually disciplined and conscious of avoiding self-indulgence, intellectuals are prone to spewing “bullshit” without end, showing off their verbosity because that’s how the game is played. Graeber is at least more disciplined and serious than most of them, especially (most of) his fellow “theorists” in the humanities.

The full title of his book is Bullshit Jobs: A Theory. I wasn’t able to find the “theory,” unless it be that bullshit jobs do in fact exist. And Graeber marshals abundant evidence to test and confirm that theory. The most entertaining, and probably the most valuable, parts of the book are the many testimonies he presents from poor souls who spend their lives in a bullshit job, which is to say a job they think shouldn’t exist because it contributes nothing to the world. The numbers of people who believe this are incredibly high. One poll in the United Kingdom found that only 50 percent of people with full-time jobs were sure their job made a meaningful contribution to the world, while 37 percent were sure theirs didn’t. A poll in Holland put the latter number at 40 percent. Even jobs that aren’t bullshit, like nurses and professors, are being increasingly bullshitized, as paperwork, meetings, and other administrative duties crowd out more meaningful tasks like taking care of patients and teaching. (Nurses reported to Graeber that as much as 80 percent of their time is now taken up with meetings, filling out forms, and the like.) Considering these facts, as well as the existence of many second-order bullshit jobs (jobs done in support of those directly engaged in bullshit), Graeber estimates that well over half of all work being done in society could be eliminated without making any real difference.

What sorts of jobs are we talking about? Not most lower-tier jobs: not street cleaners, bus drivers, repairmen, restaurant workers, store clerks, gardeners, construction workers, etc. These people make a contribution to the world. Graeber suggests a rough five-fold classification of bullshit jobs. First are flunkies: jobs that exist “only or primarily to make someone else look or feel important.” This includes doormen, many receptionists (those who have hardly anything to do and find the job oppressively dull), some HR assistants, and the like. Second are “goons,” jobs that have an aggressive element but “exist only because other people employ them.” For instance, most lobbyists, PR specialists, telemarketers, corporate lawyers (“I contribute nothing to the world and am utterly miserable all of the time,” one said), and national armed forces, which exist only because other countries have armies. “If no one had an army, armies would not be needed.” As for PR specialists, one of them probably spoke for many when he opined that every person who works in or for the entire advertising industry simply “manufactur[es] demand and then exaggerat[es] the usefulness of the products sold to fix it.” He concluded, “If we’re at the point where in order to sell products, you have to first of all trick people into thinking they need them, then I think you’d be hard-pressed to argue that these jobs aren’t bullshit.”

Third is the category of “duct tapers,” people whose jobs exist only because of a glitch in the organization, “who are there to solve a problem that ought not to exist.” Often this includes underlings who have to fix mistakes made by incompetent superiors. Or do nothing but deal with customers irate because something went wrong. Fourth are “box tickers,” who allow an organization to be able to claim it’s doing something it actually isn’t doing. One testimony is from a guy who was Senior Quality and Performance Officer in a local council in the United Kingdom; most of what he did involved ticking boxes, “pretending things are great to senior managers, and generally ‘feeding the beast’ with meaningless numbers that give the illusion of control. None of which helps the citizens of that council in the slightest.”

The fifth category is taskmasters, people who do nothing but assign work to others, create bullshit tasks for others to do, or supervise bullshit. Middle management frequently falls under this category, as when managers oversee workers who could perform just as well, or sometimes better, without oversight. “I just got promoted to this job,” one manager says, “and I spend a lot of my time looking around and wondering what I’m supposed to be doing.” That’s a common complaint: being forced to supervise people who don’t need supervision. (Readers of Harry Braverman’s classic Labor and Monopoly Capitalwon’t find this complaint surprising at all.) Frequently positions with the word ‘strategic’ in their names—Strategic Dean, Vice President of Strategic Development, Strategic Officer—are bullshit. “All I could do,” one such person said, “was come up with a new strategy that was in effect a re-spin of already agreed-upon strategies.” But these people are given their own staff, which they have to try to find work for.

Graeber’s classification system is somewhat interesting, though, as he acknowledges, it leaves out a lot. One huge area of bullshit it leaves out he doesn’t mention at all: bullshit academic research. Surely the large majority of academic research makes essentially no contribution to the world, except to pad CVs and advance careers. Endless conferences, “calls for papers” sent out for yet another conference, thousands upon thousands of scholarly articles published every year most of which are read by hardly anyone (more often simply glanced over). Much of the writing isn’t only irrelevant and uninteresting, superficial and unchallenging, but even perverse: again, one thinks of postmodernist obscurantism, relativism, and idealism. In the case of postmodernism and, more generally, the idealism (and centrism) of bourgeois scholarship and journalism, the bullshit serves an obvious purpose for the establishment: it distracts from structures of class and power, obscures understanding of how society works, and does nothing to advance left-wing dissent. (I discuss these matters in depth here, and also on my website.)

Graeber devotes a couple of chapters to what it’s like to work in a bullshit job and why people so often report themselves miserable. According to bourgeois psychological theories, after all, it might seem that some of these jobs are great. You hardly have to work, you have barely any real responsibilities, you can spend hours playing computer games or surfing the web. You can (in many cases) be almost as lazy as, supposedly, you want to be just by virtue of being human. But of course humans are not, in fact, lazy by nature, creatures who have to be driven to work, as bourgeois ideologies proclaim. They want to work, but on creative and enjoyable tasks. Their fundamental desire is not to slack off but to have a meaningful life, full of purpose, creativity, exploration, and love, a life of contributions to the world. To work in an utterly pointless job, therefore, day in and day out, month after month, can be maddening, soul-killing torture. It seems that the respect and prestige these people might be accorded can make it even worse, heightening their sense of being frauds or parasites.

Many of the testimonies Graeber has compiled are both sad and hilarious. Most are too long to quote here, but I’ll quote one, from a security guard:

I worked as a museum guard for a major global security company in a museum where one exhibition room was left unused more or less permanently. My job was to guard that empty room, ensuring no museum guests touched the…well, nothing in the room, and ensure nobody set any fires. To keep my mind sharp and attention undivided, I was forbidden any form of mental stimulation, like books, phones, etc.

Since nobody was ever there, in practice I sat still and twiddled my thumbs for seven and a half hours, waiting for the fire alarm to sound. If it did, I was to calmly stand up and walk out. That was it.

One might think of this guard’s job as a literal realization of the metaphorical meaning of thousands of positions filled by tens of millions of people. The colossal waste of human potential is beyond comprehension.

The natural question, aside from how to change this terrible collective situation, is how all these worthless jobs started proliferating in the first place. Why aren’t we all working fifteen-hour weeks? If we got rid of the pointless jobs and the pointless aspects of the real jobs, the resulting work could easily be taken care of by our working fifteen- or twenty-hour weeks. In fact, back in 1930 John Maynard Keynes predicted that in a hundred years the problem of scarcity would have been solved, and the major problem of the age would be to find ways to prevent ourselves from going insane with boredom. So what happened?

This is a complicated historical question that gets to the heart of how capitalism has evolved over the last century, so it isn’t to Graeber’s discredit that he doesn’t fully answer it. He first dispatches two answers conservatives give: that the world has become so complicated we need all these jobs, and they aren’t really as pointless as they seem; and that even if there are bullshit jobs, it’s only because government regulations have led to a growing number of useless bureaucrats. These answers are on the intellectual level of most conservatism, and Graeber refutes them with ease. With one piece of evidence. He points out that between 1985 and 2005 the proportion of administrators and their staff in American universities shot up even though the number of teachers per students remained largely constant. Teaching and writing certainly haven’t become so complicated they suddenly need far more administrators and staffers—so why the bullshitization of universities? It isn’t because of the big bad government either, since the number of administrators at private institutions has increased at more than twice the rateit did at public ones. So there goes the “libertarian” notion of government wastefulness. “In fact,” Graeber comments, “the only reasonable interpretation of these numbers is precisely the opposite: public universities are ultimately answerable to the public, and hence, under constant political pressure to cut costs and not engage in wasteful expenditures.”

Graeber’s own answer is that capitalism has changed its character since the days when it somewhat approximated conditions of perfect competition. When capitalism was mainly about producing things competitively, the argument that free-market enthusiasts give against the notion that corporations would ever hire unnecessary workers to do bullshit jobs made sense: maximizing profits meant paying the least number of workers the least amount possible. To hire a large number of redundant workers would be absurd. But, as Graeber argues, the logic of the economy has changed in the last forty years, with the rise of financial capitalism and the FIRE sector (including insurance and real estate). The main object now is not to produce goods competitively but to distribute large sums of money, to distribute the proceeds from enormous amounts of debt, to create money (by giving loans) and then move it around in very complex ways while extracting fees with every transaction. “The results often leave bank employees feeling that the entire enterprise is…pointless.”

So, “when a profit-seeking enterprise is in the business of distributing a very large sum of money, the most profitable thing for it to do is to be as inefficient as possible.” It can then find pretexts to take more cuts, even acting against the interests of its clients, and using its profits to hire more people and grow bigger. There seems, indeed, to be a tendency inherent in large bureaucracies, whether corporate or political, to expand, to suck up more resources as an end in itself. Graeber gives a name to the “new” dynamic that has emerged in capitalism: managerial feudalism. It’s supposed to be analogous to the creation of hierarchies of nobles and officials in medieval Europe through a process of devolution called “sub-infeudation,” in which a king would grant land to a duke, who would use the resources from that land to support a huge retinue of courtiers and vassals, many of whom would be granted their own plots of land that could support their own retinues, and so on down to local knights and lords of the manor.

“The rise of managerial feudalism has produced a similar infatuation with hierarchy for its own sake.” Managers manage other managers, each with their own staff; various levels of managers market things to one another, especially in “creative industries” like publishing, the visual arts, and film and television. It’s particularly bad in the latter industry, where there are untold numbers of producers, sub-producers, executive producers, consultants, etc., “all in constant search for something, anything, to actually do.” But even in more traditional manufacturing industries, white-collar workers are hired seemingly for the sake of having more white-collar workers. Graeber uses the example of the Elephant Tea factory outside Marseilles, France. Years ago it was bought up by Unilever, which pretty much left its old organizational structure intact. Meanwhile the workers, on their own initiative, managed to speed up production by more than 50 percent, markedly increasing profits. So what did Unilever do? Rather than hiring more workers or buying new machinery to expand operations, it hired a bunch of white-collar bureaucrats to wander around trying to think of something to do. “They’d be walking up and down the catwalks every day,” an older worker said, “staring at us, scribbling notes while we worked. Then they’d have meetings and discuss it and write reports. But they still couldn’t figure out any real excuse for their existence.” Finally they just suggested that the company shut down the whole plant and move operations to Poland—whereupon the workers took over the factory and kicked their employers out.

Even when corporate executives are presented with ways to automate tasks that white-collar employees are doing by hand, they often resist. One testimony was from a guy who was hired by a large bank to do risk management, which meant he was able to have a panoramic view of the bank’s internal processes and suggest fixes for incoherencies, vulnerabilities, and redundancies. He concluded that, conservatively, 80 percent of the bank’s 60,000 employees were unnecessary, because their jobs either could be performed by a program or were in support of “some bullshit process” to begin with. But when he presented executives with programs that would solve inefficiencies, he always faced severe hostility. Not a single one of his recommendations was ever adopted. “Because in every case,” he said, “fixing these problems would have resulted in people losing their jobs, as those jobs served no purpose other than giving the executive they reported to a sense of power.” In case after case that Graeber reports, it was clear that the higher-ups prided themselves on their bloated staffs.

The notion of managerial feudalism is evocative, and Graeber is clearly onto something with his suggestion that “there seems to be an intrinsic connection between the financialization of the economy, the blossoming of information industries, and the proliferation of bullshit jobs.” What exactly that connection is, though, is hard to tease out. The precise mechanismsare hard to tease out. His “iron law of liberalism,” formulated in Utopia of Rules, is also apropos: “any market reform, any government initiative intended to reduce red tape and promote market forces will have the ultimate effect of increasing the total number of regulations, the total amount of paperwork, and the total number of bureaucrats the government employs.” Such reforms have been abundant in the neoliberal era, and they have certainly contributed to the explosion of bureaucracy, in both the private and public sectors.

But Graeber neglects to mention the more deep-rooted forces that have made bullshitization a steadily growing phenomenon since at least the time of Frederick Winslow Taylor. Ever since management began to take control of production away from workers, to centralize knowledge in its own ranks and reduce the worker to mere appendage of the machine—but an appendage that has to be closely monitored and supervised—whole layers of unnecessary bureaucracy have existed. Much of the bureaucracy has existed only to control and monitor the direct producers, to strip power from them and keep it in the hands of capitalists or their agents. In other words, its purpose has been largely political, not directly economic or “efficiency”-related.

At the same time, it became ever more necessary to control markets and the public mind, through political and advertising propaganda. Hence the rise of the public relations industry from around the time of World War I. And hence whole new layers of massive bureaucracy, which have continued to expand for a hundred years. Meanwhile, government bureaucracies expanded exponentially in order to improve society’s “legibility” to the state and administer it for the benefit of capital. Corporate capital and the state constantly strengthened their ties, effectively intertwining, collecting practically infinite amounts of data on the population for the usual purposes of surveillance, control, and profit-making; and the processing of such data inevitably was used to justify further growth of bureaucracies, even beyond what was strictly necessary. All this was happening long before the neoliberal era, though it attained new heights of wastefulness under the impact of “deregulation,” privatization, financialization, globalization, and the information economy.

It’s significant, too, that the proliferation of bullshit jobs is itself a form of population control, of keeping people subordinate in hierarchical structures, socialized into submission, atomized and alienated from one another. African-American men are kept under control by being locked up in prisons, while whites are funneled into pointless jobs where they can be supervised and indoctrinated. The system hasn’t been consciously designed for this purpose, but the reason it’s able to expand is that it serves the interests of power-structures.

So is there any way out of our bullshit society? Can it be reformed so that half the work being done is no longer pointless? Graeber doesn’t focus on this question, since his book is supposed to be about diagnosing the problem rather than proposing solutions, but he does suggest that Universal Basic Income would help. Unlike many reforms that social movements are proposing, UBI would likely reduce the size and intrusiveness of government, not increase it. If everyone automatically received, say, $25,000 or more a year, huge and intrusive sections of government could simply be shut down (even if social welfare programs continued or expanded). Millions of bureaucrats would lose their jobs, but they would also receive an annual income allowing them to pursue other projects that interested them.

“A full Basic Income would eliminate the compulsion to work, by offering a reasonable standard of living to all, and then either leaving it up to each individual to decide whether they wished to pursue further wealth, by doing a paying job or selling something, or whether they wished to do something else with their time.” Bosses might start treating their employees better, since it would be a less frightening prospect for them to quit, and conditions in crappy low-paying jobs would have to improve in order to attract workers. Many pointless jobs would cease to exist, since few people would want them. The social changes would be so radical and far-reaching it’s impossible to fully anticipate them.

Graeber doesn’t delve into the technicalities of UBI, but he’s right it’s a proposal worth seriously thinking about. It could be a step on the road to even more radical changes.

All in all, Bullshit Jobs is a good book that’s worth reading, despite its irritating prolixity and meandering structure. It usefully highlights and names a major social malady that afflicts tens of millions of people but that few talk about, except in informal conversations among their fellow sufferers. We should all be talking about the meaningless-jobs crisis and proposing solutions that will end the rampant spiritual misery it has caused. UBI, if designed well, could be a huge step in the right direction. But ultimately, I don’t see any thoroughgoing cure except an end to capitalism itself, which is to say a (necessarily protracted) revolution that finally establishes the old socialist ideal of economic democracy. Democracy is the only real cure for all of humanity’s current ailments.

In the aftermath of the 2008 Financial Crisis, the private Federal Reserve bank cartel was front and center as a target for public outrage.

Former U.S. Congressman Ron Paul’s “End the Fed” message suddenly resonated. Americans hated Fed officials bailing out the banksters – richly rewarding them for crooked and irresponsible behavior which helped create the crisis.

But years have passed. Americans have been enjoying the expansion stage of the next great bubble. The central planners at the Fed and their colleagues at the nation’s largest banks have been busy stimulating the real estate, equity, and bond markets.

The movement to audit or end the Fed has faded back into obscurity.

That is why an article published last week in The Wall Street Journal came as a bit of a surprise. The headline is “We’ll Never Know How Bad the Federal Reserve Is,” and it serves as a reminder for those who may have forgotten the Fed is NOT your friend.

The article outlines the central bank’s policy for keeping secrets. As the primary regulator for U.S. banks, the Fed is responsible for examining banks and writing reports on what it finds.

However, those reports are not for public consumption. They are exempt from the Freedom of Information Act. Instead, they are kept in a file for 30 years, then destroyed.

Examiners might be investigating the errors and sins committed by a bank, but the public never gets to make their own evaluation. We cannot gauge either how thorough the investigation was or whether any penalties are commensurate with the crimes.

The reason for such secrecy is obvious. The Federal Reserve was designed and built to make sure neither its officials nor private bankers are held publicly accountable.

Time and again, America’s latest central bank has provided bailouts for Wall Street, with Main Street footing the bill. Not a single high-level bank executive has been prosecuted for the rampant and pervasive fraud associated with the 2008 crisis.

The big banks have prospered, growing larger and even more “systemically important,” a term which means “too big to fail.” As a regulator, the Fed is remarkable for its staggering ineptitude or for its total corruption. You decide which.

Meanwhile, politicians in Washington DC have been able to accelerate the growth of government spending, facilitated by the central bank in myriad ways.

Of course the central bankers will tell us that secrecy is important for “maintaining independence” and “security” of the markets. These claims that there is a legitimate need for secrecy would be slightly more credible if it were for a limited time.

That is not the case, however. The Fed is, in many regards, a virtual black box which shall remain closed for all time, at least if officials continue to have their way.

The most “interesting” works of the Wall Street elites in power there will never be published or examined. It is considered vital the public never knows about certain activities.

There is only one reason for that level of secrecy: We might object.

The fervor with which Fed officials oppose any attempt to bring more transparency and accountability is something Americans might now find familiar.

The central bank is another arm of the Deep State, much like the FBI and intelligence agencies.

We have learned a lot recently about what happens when entire bureaucracies operate in the dark and stop concerning themselves with the rule of law.

Senator Rand Paul is continuing his father’s effort to audit the Fed. Let us hope the developing outrage with the Deep State expands to include the central bankers.

Clint Siegner is a Director at Money Metals Exchange, the national precious metals company named 2015 “Dealer of the Year” in the United States by an independent global ratings group. A graduate of Linfield College in Oregon, Siegner puts his experience in business management along with his passion for personal liberty, limited government, and honest money into the development of Money Metals’ brand and reach. This includes writing extensively on the bullion markets and their intersection with policy and world affairs.

The Russian and Chinese governments are puzzling. They hold all the cards in the sanction wars and sit there with no wits whatsoever as to how to play them.

The Russians won’t get any help from the Western media which obscures the issue by stressing that the Russian government doesn’t want to deprive its citizens of consumer goods from the West, which is precisely what Washington’s sanctions intend to do.

The Russian and Chinese governments are in Washington’s hands because Russia and China, thinking that capitalism had won, quickly adopted American neoliberal economics, which is a propaganda device that serves only American interests.

For years NASA has been unable to function without Russian rocket engines. Despite all the sanctions, insults, military provocations, the Russian government still sends NASA the engines. Why? Because the Russian economists tell the government that foreign exchange is essential to Russia’s development.

Europe is dependent on Russian energy to run its factories and to keep warm in winter. But Russia does not turn off the energy in response to Europe’s participation in Washington’s sanctions, because the Russian economists tell the government that foreign exchange is essential to Russia’s development.

As Michael Hudson and I explained on a number of occasions, this is nonsense. Russia’s development is dependent in no way on the acquisition of foreign currencies.

The Russians are also convinced that they need foreign investment, which serves only to drain profits out of their economy.

The Russians are also convinced that they should freely trade their currency, thereby subjecting the ruble to manipulation on foreign exchange markets. If Washington wants to bring a currency crisis to Russia, all the Federal Reserve, its vassal Japanese, EU, and UK central banks have to do is to short the ruble. Hedge funds and speculators join in for the profits.

Neoliberal economics is a hoax, and the Russians have fallen for it.

So have the Chinese

Suppose that when all these accusations against Russia began—take the alleged attack on the Skirpals for example—Putin had stood up and said: “The British government is lying through its teeth and so is every government including that of Washington that echoes this lie. Russia regards this lie as highly provocative and as a part of a propaganda campaign to prepare Western peoples for military attack on Russia. The constant stream of gratuitous lies and military exercises on our border have convinced Russia that the West intends war. The consequence will be the total destruction of the United States and its puppets.”

That would have been the end of the gratuitous provocations, military exercises, and sanctions.

Instead, we heard about “misunderstandings” with out “American partners,” which encouraged more lies and more provocations.

Or, for a more mild response, Putin could have announced: “As Washington and its servile European puppets have sanctioned us, we are turning off the rocket engines, all energy to Europe, titanium to US aircraft companies, banning overflights of US cargo and passenger aircraft, and putting in place punitive measures against all US firms operating in Russia.” Instead of acting intelligently, the witless Russians are still using the US dollar for their oil trade!

One reason, perhaps, that Russia does not do this in addition to Russia’s mistaken belief that it needs Western money and good will is that Russia mistakenly thinks that Washington will steal their European energy market and ship natural gas to Europe. No such infrastructure exists. It would take several years to develop the infrastructure. By then Europe would have mass unemployment and would have frozen in several winters.

What about China? China hosts a large number of major US corporations, including Apple, the largest capitalized corporation in the world. China can simply nationalize without compensation, as South Africa is doing to white South African farmers without any Western protest, all global corporations operating in China. Washington would be overwhelmed with global corporations demanding removal of every sanction on China and complete subservience of Washington to the Chinese government.

Or, or in addition, China could dump all $1.2 trillion of its US Treasuries. The Federal Reserve would quickly print the money to buy the bonds so that the price did not collapse. China could then dump the dollars that the Fed printed in order to redeem the bonds. The Fed cannot print the foreign currencies with which to purchase the dollars. The dollar would plummet and not be worth a Venezuelan bolivar unless Washington could order its pupper foreign central banks in Japan, UK, and EU to print their currencies in order to purchase the dollars. This, even if complied with, would cause a great deal of stress in what is called “the Western alliance,” but what is really Washington’s Empire.

Why don’t the Russians and Chinese play their winning hands? The reason is that neither government has any advisers who are not brainwashed by neoliberalism. The brainwashing that Americans gave Russia during the Yeltsin years has been institutionalized in Russian institutions. Trapped in this box, Russia is a sitting duck for Washington.

And, as the USA’s economy is basically a war economy, expect more wars and mayhem coming from the US.

America’s long-term “balance sheet numbers” just continue to get progressively worse. Unfortunately, since the stock market has been soaring and the GDP numbers look okay, most Americans assume that the U.S. economy is doing just fine. But the stock market was soaring and the GDP numbers looked okay just prior to the great financial crisis of 2008 as well, and we saw how that turned out. The truth is that GDP is not the best measure for the health of the economy. Judging the U.S. economy by GDP is basically like measuring the financial health of an individual by how much money he or she spends, and I will attempt to illustrate that in this article.

If I went out right now and got a whole bunch of new credit cards and started spending money like there was no tomorrow, would that mean that my financial condition had improved?

No, in fact it would mean that my long-term financial condition just got a whole lot worse.

GDP is a measurement of how much economic activity is happening in our society, and it is basically an indication of how much money is changing hands.

But just because more money is changing hands does not mean that things are going well. What really matters is what is happening to assets and liabilities. In other words, is wealth being built or is more debt just being accumulated?

Sadly, there are only a handful of bright spots in our economy. A couple of very large tech companies such as Apple are accumulating wealth, but just about everywhere else you look debt is growing at an unprecedented pace. Household debt has never been higher, corporate debt has doubled since the last financial crisis, state and local government debt is at record highs, and the U.S. national debt is wildly out of control.

If I went out tomorrow and spent $20,000 with a bunch of new credit cards, I could claim that my “personal GDP” was soaring because I was spending a lot more money then before. But my boasting would be pointless because in reality I would just be putting my family in an extremely precarious financial position.

Economic growth that is produced by continually increasing amounts of debt is not a positive thing. I wish that more people understood this very basic concept. The following are 10 numbers that prove that America’s current financial condition is a horror show…

#1 U.S. consumer credit just hit another all-time record high. In the second quarter of 2008, total consumer credit reached a grand total of 2.63 trillion dollars, and now ten years later that number has soared to 3.87 trillion dollars. That is an increase of 48 percent in just one decade.

#2 Student loan debt has surpassed 1.5 trillion dollars for the first time ever. Over the last 8 years, the total amount of student loan debt has shot up 79 percent in the United States.

#3 According to the Federal Reserve, the credit card default rate in the U.S. has risen for 7 quarters in a row.

#4 One recent survey found that 42 percent of American consumers paid their credit card bill late “at least once in the last year”, and 24 percent of Americans consumers paid their credit card bills late “more than once in the last year”.

#5 Real wage growth in the United States just declined by the most that we have seen in 6 years.

#6 According to one recent study, the “rate of people 65 and older filing for bankruptcy is three times what it was in 1991”.

#7 We are in the midst of the greatest “retail apocalypse” in American history. At this point, 57 major retailers have announced store closings so far in 2018.

#8 The size of the official U.S. budget deficit is up 21 percent under President Trump.

#9 It is being projected that interest on the national debt will surpass half a trillion dollars for the first time ever this year.

#10 Goldman Sachs is projecting that the yearly U.S. budget deficit will surpass 2 trillion dollars by 2028.

And I haven’t even talked about unfunded liabilities. Those are essentially future commitments that we have made that we don’t have the money for at the moment.

If individuals, corporations, state and local governments and the federal government all stopped going into more debt, we would plunge into the greatest economic depression in U.S. history immediately.

The system is deeply, deeply broken, and the only way that we can keep this debt bubble going is go keep accumulating even more debt.

Anyone out there that believes that the U.S. economy has been “fixed” is completely deceived. NOTHING has been fixed. Instead, our long-term financial imbalances are getting worse at an escalating pace.

Unfortunately, the attitude of the general public is so similar to what it was just prior to the great financial crisis of 2008. Most people seem to assume that just because we have not experienced great consequences for our very foolish decisions up to this point that no great consequences are coming.

And many also assume that since control of the White House has switched parties that somehow things must magically be better as well.

Of course the truth is that the only way that our long-term problems are ever going to be fixed is if we start addressing the issues that caused those long-term problems in the first place, and that simply is not happening.

As I have traveled extensively over the course of the past year, I discovered that most Americans do not want to make fundamental changes to the system, because they are under the illusion that the current system is working just fine. So it will probably take another major crisis before most people are ready to consider fundamental changes, and when it finally arrives we will need to be ready to educate the public.

The system that we have today is not fundamentally sound at all. We desperately need to return to the values and principles that this nation was founded upon, but until things start getting really, really bad it is highly unlikely that the American people will be ready to embrace those changes.

Washington cannot dictate trade rules to others, Germany’s economy minister said, adding that his country should be more assertive and defy American sanctions – particularly by investing more in Iran.

“We don’t let Washington dictate [their will] on trade relations with other countries,” German Economy Minister Peter Altmaier told Bild newspaper on Saturday. He said the US sanctions on Iran are one instance in which America’s neglect of its partners are clearly shown.

Therefore, Germany and other European countries should feel free to pursue improved relations with Tehran. “German businesses can continue to invest as much as they want in Iran,” Altmaier said, adding, however, that “many companies depend on loans from banks, most of which refinance themselves in the US – and it creates problems.”

Altmaier’s words come after the Trump administration imposed a second round of sanctions targeting Iran’s purchase of US dollars, despite pleas from some world powers. Earlier this year, Washington slapped Tehran with sanctions aimed at curtailing trade as well as the energy and shipbuilding industries.

These restrictions have damaged EU ties with Iran, which flourished after the milestone 2015 nuclear deal abandoned by the US. Last week, the EU responded to the latest Iran sanctions by calling on companies to disregard threats from the US. Apart from the issue of Iran, the US and Europe are locked in a dispute over tariffs on steel, aluminum, and automobiles.

With that in mind, the German minister said, the world now risks sliding into an all-out economic conflict, adding that “we are just a few yards from the edge,” and “a global trade war would not know winners, only losers.” Politicians have no right to jeopardize hundreds of thousands of European jobs that depend on US-EU trade, he stated.

“We have learnt from the past that mostly customers are suffering from trade wars as goods and services are getting more expensive,” Altmaier said. “This trade war hampers economic growth and brings new uncertainties.”

Duh! Guess where the money is going to? The military of course, just like Ancient Rome which spent all its moneys on wars and more wars:

“The U.S. military budget is $824.6 billion. That’s the president’s budget for Fiscal Year 2018 submitted to Congress. It covers the period October 1, 2017 through September 30, 2018. Military spending is the second largest federal government expenditure after Social Security at $1 trillion.”

According to the latest Monthly Treasury Statement, in June, the US collected $225BN in tax receipts – consisting of $110BN in individual income tax, $91BN in social security and payroll tax, $4BN in corporate tax and $20BN in other taxes and duties- a drop of 2.9% from the $232BN collected last July and a reversal from the recent increasing trend…

… and in July, the 12 month trailing receipt total was barely higher compared to a year ago, up just 0.4% Y/Y after rising as much as 3.1% at the end of 2017.

Meanwhile Federal spending rose, up 9.9% from $275BN last July to $302BN last month.

… where the money was spent on social security ($83BN), defense ($49BN), Medicare ($24BN), Interest on Debt ($35BN), and Other ($111BN).

This resulted in a July budget deficit of $77 billion, in line with expectations, and a signification deterioration from the $43 billion recorded in July of 2017.

The July deficit brought the cumulative 2018F budget deficit to over $684BN during the first 10 month of the fiscal year, up 28% over the past year.

This is the highest 12 month cumulative deficit since May 2013; as a reminder the deficit is expect to increase further amid the tax and spending measures, and rise above $1 trillion as soon as next year.

Most Wall Street firms forecast a deficit for fiscal 2018 of about $850 billion, at which point things get… much worse. As we showed In a recent report, CBO has also significantly raised its deficit projection over the 2018-2028 period.

But while out of control government spending is clearly a concern, an even bigger problem is what happens to not only the US debt, which recently hit $21.3 trillion, but to the interest on that debt, in a time of rising interest rates.

As the following chart shows, US government Interest Payments are already rising rapidly, and just hit an all time high of $538 billion in Q2 2018.

Interest costs are increasing due to three factors: an increase in the amount of outstanding debt, higher interest rates and higher inflation. Needless to say, all three are increasing; furthermore, a rise in the inflation rate boosts the upward adjustment to the principal of TIPS, increasing the amount of debt on which the Treasury pays interest, turbocharging the amount of interest expense.

The bigger question is with short-term rates still just around 2%, what happens when they reach the mid-3% as the Fed’s dot plot suggests it will?

While some nations are backing away from Iran amid US threats to sanction anyone who continues to do business with them, Chinese officials are reiterating that they will continue to do business with Iran. They are one of Iran’s largest trading partners.

China is a party to the P5+1 nuclear deal. The US withdrew from the deal in May, and now demands everybody follow the sanctions on the program as if the nuclear deal didn’t exist. China buys 650,000 barrels of oil per day from Iran, and will continue to do so. That’s about 7 percent of China’s oil imports.

None of the P5+1 parties to the deal intend to halt trade with Iran, though some European companies are saying they will halt such trade in spite of promises of EU protection. Iran has said they will continue to export oil and do business as best they can irrespective of US attempts to prevent them.